Sunday, May 17, 2015

Eurusd Could Rally In A Decade

On 19th March 2015, I posted an analysis on why price could possibly come to the end of the long term bearish correction which lasted for about 7 years and dragged Euro from 1.6 to 1.1 ( more than 5500pips). Read here

We could also note the preceding bullish impulsive move from 2000 to 2008 ( a period slightly more than 7 and half years) that took Euro from 0.8 to 1.6, about 7800pips.

The retracement is about 70.7% ( infact trapped between 61.8% golden ratio and the 70.7% square golden ratio) retracement of the preceding bullish impulsive move ( move from 2000-2008).

The 70.7% retracement supporting price movement shouldn't be surprising if we also take note that the ratio of 5500pips to 7800pips is about 0.707.

The Origin of the square golden ratio 0.707

Whether this is a coincidence or price is speaking in mathematical ratio, only time will tell.

This long term retracement has completed a double zig-zag corrective pattern and price is expected to rise in another years of bullish trend to break above 1.6 (Year 2008 high).

The prospective long term bullish trend will expectedly subsume the daily and intra-day bullish and bearish trendy and corrective actions.

It's still a big debate which decides the other; fundamental or technical analysis?.

Fundamental analysis claims to know why things happen from decisions made while technical analysis studies the behaviour and forecast the decisions years before they are even made.

If Euro rises against the United states dollar above 1.6 to 1.8 in about a decade's time or more, I might have to believe the technicals are the winners.